Obama wants to exend the current tax rates for the middle class.....

[degsme]

Wrong trap. DoD spending has a Fiscal Multiplier of LESS THAN 0.5. That means for every $1 spent on a DoD job (remember only about half goes to salary) unemployment NATIONALLY is reduced by the equivilent of $0.50 GDP growth. IE Half a job. If, for example, we simply took all the engineers working on the JSF, and reassigned them to Bridge and roadway refurbishment projects, and then simply walked away from the JSF production facilities and instead spent the next months payments on bridge and road infrastructure improvements (including repair) - there would be an INCREASE in GDP growth. Simply by switching what we spend on.

No not really. The FICA holiday does not count, Nor the tax changes that the TEMPORARY AJRA brought WHICH NO LONGER APPLY

Yes, the FICA tax holiday counts, because the original level of taxation will never be restored[/qote]

Um first off, if your logic held, then the FICA tax would not have gone into effect EVER. Secondly it is set to expire Jan1. And Obama isn't going to extend it without a roll back of the Sequestration cuts. And the Tea Party in Congress is not going to allow a rollback of the Sequestration. So its going to expire Jan 1.

Secondly, the FICA tax holiday has IMPROVED the economy, albeit only marginally. So to argue that its a tax policy that is harming growth is silly.

Now as to the other tax itens you have cited, these are parts of the PPACA - who's tax implications are not yet in effect and hence have not affected the economy for the last 3 years.

And that is THE ONLY ACT that Obama has gotten through congress.

So yes, WE ARE Living under the tax code of GWB. Except for COLA/Inflation adjustments WRITTEN INTO THE ORIGINAL LAW our Tax Tables HAVE NOT CHANGED SINCE 2001 Go look
http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets

aNd I've factually eviscerated all your claims - like the most recent one that somehow, if you own a gas station and take home only $50k/yr you will somehow be affected by a rise in marginal tax rates on those earning $150k/yr or more.

Who said anything about "only $50k a year?" It isn't eviscerating anything to introduce made up numbers, Degs.

You did Trap. You introduced the Gas Station Owner who earns too little to plow anything back into his Gas station. Well by definition, that means she's not making enough profit to be subject to a raise in taxation on the upper quintile earners. ($90k and above http://en.wikipedia.org/wiki/Household_income_in_the_United_States) If you have $90k in REPORTABLE EARNINGS, you can afford to pay a higher marginal rate.

 

[TaiPan]

I'm not going to quote here, but if I may interject a question here, does your DOD multiplier take into account the supply chain which may or may not be directly attached to the job itself ? Secondly and this is where you lose me degsme, whether a job is cut, either civilian or military, a job is lost in the economy, how factors and multipliers account for that. I believe there is an assumption that a military job cut, is simply subsumed by the economy without difficulty. I would argue that with limited exception such is not the case. I would point you towards the ending of defense contracts at Avondale Shipyards (part of Northrup Grumman) where the ultimate direct hit on the economy will be more than 17,000 jobs. There is no comparable replacement for probably about 75-85% of these jobs and the company has announced that there will be only limited personnel transfers to other Northrup Grumman operations.

I think if we could have the benefit of a more detailed analysis of what actually occurs and how these jobs reintegrate into the economy with the higher multiplier effect, then perhaps it would be easier to follow your arguments.As background the shipyard is closing because it is completing it final military construction project. There are no future contracts forthcoming, and since Reagan killed all supportive subsidy for the US Flag Shipping and US shipbuilding industry, there is no future business.

Tai Pan

 

[trapdoor]

I'm not going to quote here, but if I may interject a question here, does your DOD multiplier take into account the supply chain which may or may not be directly attached to the job itself ? Secondly and this is where you lose me degsme, whether a job is cut, either civilian or military, a job is lost in the economy, how factors and multipliers account for that. I believe there is an assumption that a military job cut, is simply subsumed by the economy without difficulty. I would argue that with limited exception such is not the case. I would point you towards the ending of defense contracts at Avondale Shipyards (part of Northrup Grumman) where the ultimate direct hit on the economy will be more than 17,000 jobs. There is no comparable replacement for probably about 75-85% of these jobs and the company has announced that there will be only limited personnel transfers to other Northrup Grumman operations.

I think if we could have the benefit of a more detailed analysis of what actually occurs and how these jobs reintegrate into the economy with the higher multiplier effect, then perhaps it would be easier to follow your arguments.As background the shipyard is closing because it is completing it final military construction project. There are no future contracts forthcoming, and since Reagan killed all supportive subsidy for the US Flag Shipping and US shipbuilding industry, there is no future business.

Tai Pan

Tai Pan: His DoD multiplier is basically a mathematical fiction. He one provided me with a paper in support of the DoD multiplier that found that in some cases the multiplier is more than 1.2, and it is usually around 1, so a the very least military spending is returning what is spent. He can't provide a mechanism that shows how $10 spent building a bridge does anything different to the economy than $10 building a tank.

 

[TaiPan]

Tai Pan: His DoD multiplier is basically a mathematical fiction. He one provided me with a paper in support of the DoD multiplier that found that in some cases the multiplier is more than 1.2, and it is usually around 1, so a the very least military spending is returning what is spent. He can't provide a mechanism that shows how $10 spent building a bridge does anything different to the economy than $10 building a tank.

This is why I asked the question, I'm no graduate economist, but I am a damned good analyst. I'm not saying anybody is wrong, I just want to see it in the context of the real world.

Tai Pan

 

[degsme]

This is why I asked the question, I'm no graduate economist, but I am a damned good analyst. I'm not saying anybody is wrong, I just want to see it in the context of the real world.

Tai Pan

DoD Multiplier is an empirically determined number that INCLUDES supply chain. And the way it breaks down is that Staffing (soldier salaries) have an FM of about 1.0 - which is low but OK. Not surprising since soldiers tend to not spend productively and oftern spend part of their salaries overseas during deployment

Weapons refurbishment has an FM of about 0.68. It would be double that except for the non-competitive sourcing requirements and the "clearance requirements".

New Weapons R&D has an FM of about 0.28. Which pulls down the overall average to 0.5.



So while a job lost is a job lost - think of it this way. Lets say you are a small sized MFG company that just bought another machine shop. They had a VP of Sales who earned about what 2 machinsts earned. You bought them because you needed the larger facility. If you lay off the VP, you can afford to hire two additional machineists. If you don't lay her off, you cannot. That's a 1 job loss for a 2 job gain. net net 1 job gain.


The problem is that the DoD sector is SO INCREADIBLY INEFFICIENT in resource usage, that in laying someone off, you free up funds to be used elsewhere that are then used at AT LEAST TRIPLE the efficiency. And I'm citing CONSERVATIVE Economiss on this data.

Consider that the Fiscal Multiplier for just shifting say the exercise training costs of an armoured division to child care subsidies results in an EIGHT FOLD increase in GDP for that $1 spent. Better yet, keep the soldiers on staff, have them instead work on refurbishing a section of highway for 1/2 the exercise costs and spend half of them on childcare. You now have an FM that is 5.5 times what it was before AND you've not lost a single job.